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ISPs 'Exaggerate the Cost of Data'

Barence writes "ISPs are wildly exaggerating the cost of increased internet traffic, according to a new report. Fixed and mobile broadband providers have claimed their costs are 'ballooning' because of the expense of delivering high-bandwidth services such as video-on-demand. However, a new report from Plum Consulting claims the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB. The report labels claims of ballooning costs a 'myth.'"

173 comments

  1. Yea. by Anonymous Coward · · Score: 2, Insightful

    No fucking shit.

    1. Re:Yea. by arisvega · · Score: 1

      I believe that many of the ISPs have been spoiled: all these years, and in particular after the aDSL boom, they were used into money pouring in with no real expenses in place-- especially since most of them did not even have to bother with digging the actual streets for more cables, since that was supposed to be a phone provider's domain (a Someone Else's Problem situation)

      What has changed now is that internet usage is catching up, things are really starting to look like they did some years back in the shiny ISP commercials ("stream your videos EVERYWHERE!", "do this!", "do that!") --or at least they have to, and the ISPs are incapable to meet all those demands they have been encouraging all these years their subscribers to place upon them. When they were promising streaming for everyone, everywhere, always, what did they expect would happen? Okay, they fished and got themselves clients, but with clients comes traffic demand, and now they have to deliver what they promised.

      Delivering to millions of subscribers involves, well, being more involved, actually. Which may demand digging or otherwise innovating for better infrastructure. When ISPs got into "the game" most of them thought all they need do is lease some copper, or some fiber optic, and money would be flowing in endlessly and effortlessly- check stockpricees and you will see ISPs spiking a tenfold on "the golden aDSL era" of about 2006 to 2008. Now they see that's not the case, and they have started complaining because their profit margin is not as high as they expected it to be, so no more bonuses and fat paychecks.

      Of course they will try to keep their money: I foresee either a radical increase on pricing, a radical cap on streaming and total disregard of net neutrality, or both.

      --
      The three laws of thermodynamics:(1) You can't win. (2) You can't break even. (3) You can't even quit.
  2. Carefull by Trubadidudei · · Score: 4, Informative

    Note that this research was funded by the content providers (like skype) ISPs were asking to pay extra for the bandwidth their services use. I'm not pointing any fingers, but it's something to think about.

    1. Re:Carefull by lennier1 · · Score: 2

      ... Option C: All sides are talking out of their asses and the truth is somewhere in the middle.

    2. Re:Carefull by gmack · · Score: 4, Insightful

      Not really, In places where the b/w costs are competitive (server hosting) I don't pay much more than that. ISPs only get to charge more because there are fewer options, on the other hand, last time I was in a telco building pretty much everyone was using ATM switching equipment and that will drive the costs up.

    3. Re:Carefull by Richard_at_work · · Score: 1

      You mean, the truth is ... Option B?! Wow! Now, what exactly was Option B?

    4. Re:Carefull by tech4 · · Score: 2

      I'm sure they would provide you bandwidth at that price if you moved living inside server farm and one of the large peer exchanges.

    5. Re:Carefull by Elbart · · Score: 1

      Asses... middle... oh boy/girl.

    6. Re:Carefull by gmack · · Score: 4, Insightful

      That is exactly my point. The entire cost of running an ISP is the costs associated with the "last mile" and they are using that to overcharge. I would be much more understanding if the limitations I faced were due to the copper rather than artificial charges from the ISP side.

    7. Re:Carefull by tech4 · · Score: 2

      Which is far from cheap, even less so as technology in this area has been advancing really fast the recent 20 years and they've had to do it several times. It costs several thousands to bring those cables to just one building and even more in cities as you need to open up the streets. They are making it as an investment, hoping to get it back in subscription fees within several or more years. It's hard from artificial charges.

    8. Re:Carefull by mabhatter654 · · Score: 3, Interesting

      The point of asking content providers is that they are a fixed quantity with deep pockets. ISPs know they can't go to the regulators because if the books on the situation got opened they'd get smack from legislatures.

      The big problem is that "the Internet" is still very much a series of nonuniform networks with lots of people trying to make toll booths rather than a "fabric" across the country. For instance my Comcast connection to the Internet shows up 30 miles away in the next city when the route is traced. When I had AT&T I think it went over 100 miles before it was "on the Internet".

      This is a problem because when you use Skype to call your friend across town with a different ISP the ISPs are holding Skype up for cross-state traffic that should just go across town. That's the problem that needs to be addressed.

    9. Re:Carefull by gmack · · Score: 2

      The monthly rate more than covers that cost of installation and maintenance of those lines. The technology advance is quite honestly not expensive even at $60 per port on ADSL2+ equipment (slightly high) they can expect to make that money back long before the next technology rollout. And quite frankly, they haven't had to worry about changing the actual cable (and no, it shouldn't involve tearing out streets at this point because most of that is in conduit) until recently with the moves to fiber.

      To be clear: I don't mind being charged a monthly rate. What I object to is being charged $15/ GB for over b/w fees.

    10. Re:Carefull by TubeSteak · · Score: 4, Informative

      Even for ISPs running their own network, such as BT, Davies [CTO of communications provider Timico and a member of the board at the Internet Service Providers' Association] claims the figures of â0.01-0.03 per GB are "rubbish". "It's an order of magnitude greater than that," he claimed.

      One order of magnitude.
      So.. â0.10-0.30 per GB?

      The difference between â0.01 and â0.10 doesn't strike me as "somewhere in the middle."
      Not when they're charging â10.00 for a gigabtye.

      --
      [Fuck Beta]
      o0t!
    11. Re:Carefull by richlv · · Score: 1

      wait, what "their services" ? is skype now financing internet connections to households ? last i heard it was households/individuals getting an internet connection to use for data transfer... which would be like somebody buying a car and then getting told by the manufacturer "oh, you will transport pumpkins with it ? there's a 30km limit on it, after that it's 2.5 units per km !" (there's a car analogy; and i might be in favour of it as i don't like pumpkins)

      --
      Rich
    12. Re:Carefull by WorBlux · · Score: 1

      The internet was designed to be p2p.Mesh networks seem bery promising, at least for local traffic and telephony.

    13. Re:Carefull by zippthorne · · Score: 4, Insightful

      The truth is never in the middle. Sometimes the truth isn't even on the same axis as the claims. The truth is what the truth is, and you can't find it by simply averaging the claims of interested parties.

      The truth, in this case, is that the ISPs are balkanized monopolies. Except for a few places, you've only got one or two options in any given area. Since there's no real competition, they can basically charge what they want. The costs don't really come into it.

      --
      Can you be Even More Awesome?!
    14. Re:Carefull by Xugumad · · Score: 1

      Actually, they're charging £2.25/GB for overage ( http://www.timico.co.uk/soho/ip_connectivity/adsl ), although Timico have the most insane pricing I've seen in an ISP. Two lines on their 50GB/month service (£22 each) are a cheaper option than their 100GB/month server (£50).

      A much saner (business) pricing example can be found from Demon: http://www.demon.net/broadband/business-broadband - if you're in an exchange with LLU, £19/month gets you a 200GB allowance during peak hours and unlimited off-peak. If you're not on an LLU exchange (and this also says volumes about BT's pricing), £30/month gets you a 100GB allowance during peak hours (and did I mention the line speed is a quarter of the LLU package?)

    15. Re:Carefull by geogob · · Score: 1

      Or someone uses the term "order of magnitude" without actually knowing what it really means, not that this ever really happens.

    16. Re:Carefull by Anonymous Coward · · Score: 0

      > Wow! Now, what exactly was Option B?

      Kicking your ass, and collecting $200!

    17. Re:Carefull by Anonymous Coward · · Score: 0

      ... The actual costs required to supply the service don't really come into it.

      Fixed that for ya. In there somewhere are the real costs but one would need to cut out non-essential costs in order to have an accurate view. Given $10/GB, it wouldn't be surprising if +/- $4/GB was used to pad the executive salaries and cover existing debt.

    18. Re:Carefull by davester666 · · Score: 1

      It's like when you go from 'kilo' to 'mega', right?

      --
      Sleep your way to a whiter smile...date a dentist!
    19. Re:Carefull by Reziac · · Score: 2

      My provider is a one-man band and he likes to talk about his business. He told me flat out that he asks customers to be reasonable about uploading because uploading costs him money, but downloading is free.

      The cost? He told me it was about 5 cents per GB. (Bandwidth bought directly from AT&T.)

      --
      ~REZ~ #43301. Who'd fake being me anyway?
    20. Re:Carefull by Anonymous Coward · · Score: 1

      Mmmm ...

      Given what the ISP's are charging their customers per gigabyte their costs are more than being covered. And if the customers didn't have access to the content the content providers provided the Internet (the whole raison d'etre for the ISP's) would be that much less attractive to said customers ... and the prices the ISP currently charges would have to drop to make it more attractive.

      The ISP reasoning is simply a ploy to bill both sides of the content equation (the customer and the provider) and super short sighted. If it succeeded they could could kill the golden goose.

    21. Re:Carefull by Bengie · · Score: 3, Insightful

      Internet protocol is meant to be P2P, but routing tables aren't. They work best with a hierarchy.

    22. Re:Carefull by shentino · · Score: 2

      And that so called "last mile" would be better off in the hands of the local city council.

      I find it very telling that Monticello tried that and got sued.

    23. Re:Carefull by Anonymous Coward · · Score: 1

      Cheers. I die a bit inside when everything but the real cause is raised when people talk about ISP service. I am glad at least some people are aware if the real problem. The point about the balance of truth between several claims is also spot on.

      And so this comment isn't entirely gushing, here is some light reading to back up the idea that the problem isn't technical but rather economic/political: http://mises.org/journals/rae/pdf/RAE9_2_3.pdf

      In short, ISPs typically have franchise monopolies granted to them at the federal, state and municipal level. Multiple providers may operate within the bounds of a city, but the way in which they are allowed to overlap and actually compete is often prohibited. This protectionism is justified by the claim that duplication of public utilities is harmful and so instead infrastructure is fixed and the city,state or federal government regulates who controls it. They usually have blocks dedicated to their operations while other ISPs have other areas. Even when overlap occurs, duplication is again prohibited so infrastructure is shared in various schemes by multiple providers, usually with one party being the dominant owner who rents it at monopoly prices.

      There are various other interests that slow development. For example, the reason I am using a shitty DSL connection in the heart of Seattle is because I am right near the Seattle University, which happens to be given control of the surrounding area by the Seattle city council. They contract out to Qwest(not the worst corporation in the world, considering they did not cooperate with all that wiretapping as far as I remember, but still using special privilege to stay in operation). Local Seattle journalism tends to not look too hard at the connection between business and the state so I haven't been able to dig deeper than this, but it is sufficient. I get one choice for service provider because government will steal and kidnap anyone who tries to compete. Thus innovation and service falls to monopoly levels.

    24. Re:Carefull by Anonymous Coward · · Score: 0

      Exactly this. The actual costs really don't matter at this point. The level of inflation the ISPs expect consumers to pay, even based on their own assessments, is truly extraordinary.

    25. Re:Carefull by Anonymous Coward · · Score: 0

      I actually did a wireline data cost study about 7 years ago for a telco and found it very difficult to price out because of the high rate of equipment and technology change and because historical expenditures were not archived in a manner that supported analysis. For example, some expenditures covered multiple lines of business and assumptions would have to be made about attribution. Also, numbers were quite different for endpoints within the ISP's own network versus traffic that went through a peering point (er, went outside the ISPs network).

      Bottom line: Internal traffic was around $1 to 2 per gig for internal and 2 to 3 for external. Costs also were dropping because backbone equipment capability was increasing phenomenally but this was somewhat offset by investment required to stay competitive with data rates on the endpoints. eg: same telco spent over 1 billion two years ago for upgrades to DSL to increase data rates for existing customers. An interesting business.

      My opinion: the only way the cost is .01 to .03 per gig is if the situation is completely greenfield (new so no sunken costs to carry forward), and you assume a long life for infrastructure (ie: no future capital investment required to maintain the subscriber base), and you ignore the myriad of associated expenditures that may or may not be included in total cost of operation. Just seems too low. At this point I would think costs would be 10 to 20 cents. Eh, but I haven't looked at the issue for a long time.

    26. Re:Carefull by Anonymous Coward · · Score: 0

      The entire cost of running an ISP is the costs associated with the "last mile"

      Really? So I can just call up AT&T, Level3, or another top-level carrier and they'll sell me a FREE point to point OC-192 from New York to L.A.?
      Sweet, sign my ass up.

    27. Re:Carefull by Anonymous Coward · · Score: 0

      Note that this research was funded by the content providers (like skype) ISPs were asking to pay extra for the bandwidth their services use. I'm not pointing any fingers, but it's something to think about.

      What about saying Plum Consulting is wrong in their report? Are you saying that?

    28. Re:Carefull by nobaloney · · Score: 1

      Nobody pays per GB at the wholesale level. More like us$30 per mbps ( IIRC that's circa 500 GB/Mo at full speed 24/7), or in other words about 6c per GB, if you use your connection full time at the limit. 95 percentile billing, used by many providers, changes the numbers a bit as the top 5% of your transit speed use doesn't get counted. And some providers are still charging for the highest bandwidth used in either direction and you get the other direction for free.

      Which, by the way, lets many local ISPs who buy transit have a free ride on outgoing data when they overcharge you for hosting your website.

  3. Another Report by the Same Institution Concluded.. by Alcoholic+Synonymous · · Score: 4, Funny

    Another report by the same Institution concluded that water is wet, electricity is not magic, and that dinosaurs are in fact extinct. The results are still pending on if a duck weighs less than water though. But on a serious note, it's good to see people calling bollocks on these claims. It's not that these things aren't problems, it's that they inflate the cost estimates grossly and delay infrastructure upgrades purposely.

  4. Misleading by TheRaven64 · · Score: 1

    That figure is the amount that I pay for data from my colo, but that assumes that the infrastructure already exists. If you have a cable network with 100Mb/s of bandwidth, then you can sell 10Mb/s connections to 10 people. If you've sold them to 5 people, then the cost of adding another customer is basically zero. You can probably get away with selling 10Mb/s connections to 100 or even 200 people if they have typical modest usage patterns, because each one will still be able to get 10Mb/s for the short periods that they saturate the line. If they start all using the connection at the same time, then you have no choice but to increase your overall network capacity. This means laying more fibre. The cost may still be under three eurocents per gigabyte, but that's amortised over the entire life of the new cable, which may be a decade (or more): the ISP has to pay for it all up front. This is where the increase in costs comes from. They have to make significant capital investments, they don't have a significant change in their operating expenses.

    --
    I am TheRaven on Soylent News
    1. Re:Misleading by jgreco · · Score: 2

      We used to have this thing called Ma Bell that had the same problem: they amortized costs over decades. It worked.

      It doesn't bother me too much that service providers would prefer a shorter timeframe in which to recapture their invested funds, but the problem is that they then want to keep charging the higher prices even after they do, make only modest further improvements, and rake in profits at insane rates. Where I live, cable Internet prices have been basically flat for more than a decade, and performance has maybe doubled in that time. It's hard to buy the crying when I know the bandwidth costs are dropping, the networks can handle it, and the companies are reporting record profits.

    2. Re:Misleading by TheRaven64 · · Score: 2

      Amortising costs over decades works for a telephone system. They transitioned the exchanges from loop-disconect to DTMF, but aside from that the wires laid in the '20s still work today. They've had almost a century to make back the initial (taxpayer subsidised) investment. The demands of an analogue voice channel have remained constant for that entire time.

      When it comes to Internet access, the demand changes much more rapidly. In 2001, I had a 1Mb/s Internet connection, and it was the fastest that my ISP provided. Now I have a 10Mb/s connection and they've just finished deploying infrastructure to support 100Mb/s in my area. That's the third major upgrade that they've done in that time. They can't amortise the cost over decades, because the new infrastructure is obsolete after just one decade. I pay less for 10Mb/s as they were charging for 512Kb/s back then (much less if you include inflation), and for the cost of my 1Mb/s connection in 2001, they'll now sell me a 50Mb/s connection today.

      --
      I am TheRaven on Soylent News
    3. Re:Misleading by spire3661 · · Score: 0

      Its interesting that the example you use was a company forcefully dismantled by a court of law. Good choice.

      --
      Good-bye
    4. Re:Misleading by Commontwist · · Score: 1

      Easy way to dismiss the charges is to for the ISPs to reveal every single cost and bring the truth to light. Let truth and justice prevail!

      Uh huh. Not going to happen unless you pry that data from their cold, dead hands.

    5. Re:Misleading by fluffy99 · · Score: 2

      That figure is the amount that I pay for data from my colo, but that assumes that the infrastructure already exists. If you have a cable network with 100Mb/s of bandwidth, then you can sell 10Mb/s connections to 10 people. If you've sold them to 5 people, then the cost of adding another customer is basically zero. You can probably get away with selling 10Mb/s connections to 100 or even 200 people if they have typical modest usage patterns, because each one will still be able to get 10Mb/s for the short periods that they saturate the line. If they start all using the connection at the same time, then you have no choice but to increase your overall network capacity. This means laying more fibre. The cost may still be under three eurocents per gigabyte, but that's amortised over the entire life of the new cable, which may be a decade (or more): the ISP has to pay for it all up front. This is where the increase in costs comes from. They have to make significant capital investments, they don't have a significant change in their operating expenses.

      Which is exactly what's happening. The ISPs are badly oversubscribed because customers in the past were barely using the bandwidth they bought. They just wanted a faster download on occasion. Now they're all demanding streaming netflix in the evening hours and the telcos are having to increase the infrastructure bandwidth to keep up. This is especially true for cell service. You might have 4G speeds to the tower, but that tower is heavily oversubscribed

      This is really their own fault for advertising high speed service and suddenly everyone is demanding that they provide it all the time.

    6. Re:Misleading by sjames · · Score: 1

      The vast majority of the cost of a fiber connection is in laying the fiber. Next is the cost of the fiber itself.Fortunately, technology improvements in the last 15 years have allowed the old fibers to carry several orders of magnitude more data today by upgrading the transceivers at either end.

      These costs (all of them, including the cost of upstream) are based on the data rate, not the number of bytes transferred. A cable not actively transferring data is just wasted resources, it doesn't cost any less than one running at capacity.

      Their pricing models also suggest they are charging well above cost. Why is it that they can provide 250GB of transfer for $45/month, but the next 250GB costs $500? Shouldn't it be at most another $60?

      As for the speed of your connection, if they REALLY upgraded their infrastructure to give you 10 times the bandwidth, why didn't your cap also go up an order of magnitude?

    7. Re:Misleading by Anonymous Coward · · Score: 0

      I'll bet the wires in the middle haven't changed over that time, just the equipment at the endpoints.
      How much do you think it really costs to unplug an older piece of equipment and replace it? For DOCIS you need to swap out modems on each end for each node with maybe 100-300 subscribers per node. Even at the low end it takes practically no time to cover the costs of an upgrade. If it took so long to recover the costs how can cable companies be raking in record profits while upgrading their networks?
      We just went through this mess in Canada where ISPs (telcos and cable companies but mainly Rogers and Shaw) wanted to start charging their own customers as well as other ISPs who lease their lines for data transmitted so they could put caps on their competitors. This was mostly ON TOP OF the already ripoff-level costs for internet access in Canada. They called it UBB or usage based billing and was their attempt to kill Netflix in Canada. The were claiming that it cost them 25 to 50 cents per GB when the truth is somewhere around 3 cents in Canada. The CRTC (Canada's FCC) was completely OK with this as it is run by ex telco and cable company execs. Once the populace revolted the federal government (seeing easy votes) stepped in and told the CRTC to re-evaluate its position.

      In short, the telco level ISPs are full of shit about their data costs, data is somewhere less then 3 cents per GB and falling.

    8. Re:Misleading by Tony-A · · Score: 1

      >Why is it that they can provide 250GB of transfer for $45/month, but the next 250GB costs $500?
      In a word. Oversubscribed.
      Anyone who subscribes to the second 250GB tends to use ALL the first 250GB (instead of the more usual 5 or 10 GB).

  5. Re:Maybe Plum Consulting should become an ISP? by tech4 · · Score: 4, Informative

    It's not only infrastructure. Not even starting at wages for workers and other recurring costs, ISP's have to pay each other to buy bandwidth from them. Only the tier 1 ISP's can get away with peering without extra costs.

    On top of that, their payment model isn't $0.xx/GB of transfer, it's $xxxx per Gbps of bandwidth. If ISP buys too much bandwidth, it means it will sit there without being used, or it may be used in peak times and be just sitting there the rest ~20 hours of day.

    Also, it requires there to be actual connectivity available - for example, my country as a whole has something like 30Gbps in/out. Still they're selling 100Mbps for customers to use. It's perfectly sure that if everyone would use that 100Mbps at once to download content off the country, it would not be enough. However, it works out because home users rarely need that kind of bandwidth 24/7.

    If you want dedicated bandwidth that is guaranteed, then buy it. Just be willing to pay over $1000 a month for your 100Mbps line. This isn't new to anyone - it's the same in server hosting world too, but there it's more clearly marked if the bandwidth is shared or dedicated as it matters more and some people actually have real need and are willing to pay up to that $1000 a month for it. With home users, no one would do that.

  6. Units per unit by Anonymous Coward · · Score: 0

    the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB

    So to work out what the cost is for each gigabyte, we'll need to know how many GBs there are in each gigabyte.

    1. Re:Units per unit by jkflying · · Score: 1

      Chances are that it's 1.

      --
      Help I am stuck in a signature factory!
  7. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 2, Insightful

    You obviously don't understand that Plum Consulting is just pointing out that these companies are using price fixing. They all make an excuse, then all jack their rates. It's collaboration, which carries some hefty fines.

  8. Not just consumers ISP's by Big_Mamma · · Score: 2

    When you shop around for hosting, the price/GB can fluctuate wildly. Amazon's EC2 is almost at the top with $0.12/GB, but Cogent at $5/Mbit (~0.015/GB) is one of the cheapest for transit/paid traffic.

    Even less? How about free, using peering agreements on internet exchanges? This way, providers like Hetzner can sell their bandwidth for even less, like 5-10TB included and â 6,90/TB after (â 0.0069/GB).

    ISP's should just whine less and do their homework. I can understand small ISP's having trouble when leasing lines from the larger ones (article has Trimco vs BT as example), but the main problem is that the larger ISP's promote this "bandwidth is expensive" myth even harder...

    1. Re:Not just consumers ISP's by Anonymous Coward · · Score: 1

      Even less? How about free, using peering agreements on internet exchanges?

      Ports on internet exchanges are not free: someone has to pay for the switching equipment, rack space and power after all. Nor is a private peering arrangement generally free, as most data centres charge for every cable run outside your racks.

      There is no such thing as a free lunch.

    2. Re:Not just consumers ISP's by petermgreen · · Score: 2

      Cogent at $5/Mbit (~0.015/GB)

      Remember service sold by the megabit per second is typically based on 95th percentile usage, NOT average usage. So what you say is only true if your usage is near constant. Most people/companies usage isn't.

      Also IIRC cogent is known for getting into peering spats that cut them off from large parts of the rest of the internet. So afaict they should only be used as part of a multihoming strategy, not as a sole provider.

      --
      note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
    3. Re:Not just consumers ISP's by sjames · · Score: 2

      Yes, it 's 95th percentile. However, as you aggregate users, the spikes tend to average out into a more constant usage. The 95th percentile billing actually helps that by shaving off the peaks. Add in that ISPs don't give committed rates at all these days and do not hesitate to throttle and you reach a very close approximation of constant usage.

      Also keep in mind that a national ISP has a huge volume of traffic and so they can demand even lower prices.

    4. Re:Not just consumers ISP's by CBravo · · Score: 1

      Some Amsterdam prices:
      non-peering prices are like this (jointtransit prices)
      peering costs are something like this (nlix)

      --
      nosig today
  9. open ISPs by rim_namor · · Score: 1

    How do you go about setting up an 'open ISP'? I wonder about a business plan for such a thing. There is rent, the connections, lines, equipment. Sounds costly. I'm sure there a way to set up a mesh network without an ISP at all, something like I2P without any ISP, having multiple hubs over cities, that connect one to another directly, getting away from the normal ISPs.

    1. Re:open ISPs by sgt+scrub · · Score: 1

      Setting up a mesh network in heavily populated areas, like London, would be easy. It would simply require everyone use wireless routers with no password protection. The cost of connecting between heavily populated areas would be disgustingly cheap. The reason it isn't happening is there is liability attached to transferring content. Instead of a world free to communicate -- free of charge -- we have a morality laws and copyright laws and sensor-shit...

      --
      Having to work for a living is the root of all evil.
    2. Re:open ISPs by mr_mischief · · Score: 1

      It also wouldn't at all be the same as the Internet if it was London connected to London and New York connected to New York. A bunch of individuals sharing consumer-grade equipment are not going to connect London to New York, Tokyo, Houston, Sydney, Taipei, Paris, Frankfurt, Oslo, San Francisco, Tel Aviv, Cairo, Ottawa, or Warsaw. The Internet is global, after all. At some point any replacement either has to replicate the long links or use them.

    3. Re:open ISPs by sgt+scrub · · Score: 1

      You missed this sentence in my post? The cost of connecting between heavily populated areas would be disgustingly cheap.

      --
      Having to work for a living is the root of all evil.
    4. Re:open ISPs by mr_mischief · · Score: 1

      I didn't miss it. I dismissed it. You have no support for the claim.

  10. Re:Maybe Plum Consulting should become an ISP? by cheaphomemadeacid · · Score: 1

    Yea, shame on them for trying to make profit on top of the actual cost. They should sell it at cost! After all the internet is free right?

    well, i don't think you've considered that free markets might actually work ALOT better if infrastructure was non-profit ;P

  11. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Technically, dinosaurs are not extinct.

  12. To quote Iago from Disney's Aladdin by BeShaMo · · Score: 1

    Oh there's a big surprise! That's an incredible - I think I'm going to have a heart attack and die of not surprise!

  13. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    Yes, obviously, if you're a moron and don't plan for growth, it's an expensive business.
    If however you do, costs are flat, if not decreasing. For instance, a pair of 10gb cards and two dark lamdas are less than 10 1gb cards and 20 lamdas. 100gig is just moving to less cost than 1x 10gig, which means *more* (dark, at least) capacity is being freed up every day.

    The real increasing costs are in the management overhead of increasing resiliance - customers won't accept facebook/youtube/whatever being down for an hour anymore, which means for each 1gig of data, you need 1 gig pipe, plus a 1gig of 'overflow' somewhere if the pipe breaks.

  14. Re:Maybe Plum Consulting should become an ISP? by realityimpaired · · Score: 2

    It's not only infrastructure. Not even starting at wages for workers and other recurring costs, ISP's have to pay each other to buy bandwidth from them. Only the tier 1 ISP's can get away with peering without extra costs.

    If your ISP's business plan is to make up those costs on overage charges, I suggest you find a new ISP, as they will go bankrupt as soon as their customer base starts watching what they're doing.

    That kind of cost, and everything else you mention in your post, is supposed to be budgeted for in your monthly tithe err... monthly subscription fees. Overage fees are just that... fees for going over the allotted amount of monthly usage. Those fees are completely unreasonable. At that point, it does not cost them $2.50/GB to deliver that data to you, because your monthly subscription fee has already covered the lion's share of those costs. It really does only cost $0.01/GB at that point, or at least, it should only cost that little if they're doing it right.

  15. Exaggeration is normal by ElmoGonzo · · Score: 0

    Gee. Do you suppose that the credit and debit card processing banks are exaggerating the cost of a transaction? Nah.

  16. Re:Maybe Plum Consulting should become an ISP? by jenningsthecat · · Score: 4, Insightful

    I've been saying the same thing for years - as soon as any technology reaches the stage where it becomes essential infrastructure, ownership should gradually transfer to the public. And to those of you who say, "What about capitalism and free enterprise", I say "What about all the tax breaks, government handouts, favourable legislation, and public rights-of-way that these 'free market' 'capitalist' companies took advantage of to get where they are?"

    It strikes me that privatized infrastructure is like patents and copyrights in this regard. A period of full ownership and control is required in order to ensure a fair return on investment and to incentivize creation; after that period expires, the thing created belongs to the public. Everyone who complains about the screwed-up patent and copyright systems ought also to be complaining about the continued private, for-profit ownership of such things as communications infrastructure.

    --
    'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
  17. Data center bandwidth=cheap rural bandwidth=$ by pcjunky · · Score: 1

    The cost varies. I can get a 30meg bursable to 90 fiber connection in Downtown Ft. Myers, FL for around $1100/month. Getting it outside of Downtown and the cost is more than 3 times that. And there are many places where I could get bandwidth far cheaper than that (Tampa Miami).

    If you buy water next to a river it will be cheap. Want water in the middle of the desert it's going to cost. It's not the cost of the water, it's the cost of moving it.

    Video on demand (Netflix, Hulu, etc) uses 10 times the bandwidth of all other uses of the Internet combined, except maybe bit torrent (probably downloading videos anyway).

    Video is one of the reasons we have so few CLEC and alternative ISPs willing to provide residential services here. Lots of companies wanting to sell to businesses (at least 6 CLECs/WISPs I can think of), we are the only one that will sell residential service. We have several individual residential accounts that use the same amount of bandwidth as an office with 50 computers. Business customer=$250/month, residential customer=$44.

    People are using the increasingly using there Internet connection to get the same services they used to pay a Cable or satellite provider twice the money for. Many of the companies that provide these services are also the only ISPs most people can get service from (cable and phone companies). I am sure that in lots of board rooms they are talking about how Netflix and Hulu are eating their lunch and how they can stop it.

  18. Re:Maybe Plum Consulting should become an ISP? by Grave · · Score: 1

    With so many public officials throughout the developed world saying that broadband internet access is a necessity and a right for modern society, I have to agree that the infrastructure needs to be moved to public control. Just as roads are essential infrastructure, so to is the internet. I would extend this argument to cell phones, as the current system in the US is ridiculous as well, but that's rather off-topic.

    Government control of the infrastructure can be a cost-neutral endeavor, with the costs of expanding, repairing, and maintaining the system paid for by the ISP licensing fees for the bandwidth.

  19. Love the rebuttal by sgt+scrub · · Score: 1

    Davies said this is especially the case for smaller ISPs who rent lines on a wholesale basis from BT.

    Nice how he compares being overcharged by an internet service provider as the cause behind the need to overcharge people for internet service provision.

    --
    Having to work for a living is the root of all evil.
  20. Re:Maybe Plum Consulting should become an ISP? by tech4 · · Score: 1, Insightful

    The overage charges aren't supposed to make them lots of money, it's supposed to keep heavy bandwidth users in control so that the rest of the network doesn't suffer. Also, it doesn't matter how much it actually costs to the ISPs at that point. Nowhere they say it costs them $2.50/GB, but that's the price they're billing from you if you use over something like 250GB a month, which most people won't. They're free to do so. You're also free to choose your provider. However, don't bitch if there are no providers that sell you at the price you want.

    Note that sometimes just upgrading their network doesn't work. There is a limited amount of bandwidth available between ISPs and from city to city and to and from overseas. It costs billions to lay down new such cables in the bottom of the atlantic. When your ISP is the size of major ISP's, they just don't have the possibility to offer everyone dedicated bandwidth. It has to be shared.

    If they have a need to control the amount of bandwidth some heavy users use on their network, then that's the best way to go about it. Or in fact, they could either offer overage fees or severely limit your bandwidth. However, they have saw the need to do it make sure the rest of the customers aren't affected. Those torrenting and using full 100Mbps home line 24/7 are just leeches that are bringing down the network quality for rest of the customers.

    Of course, if you don't agree you can always go start your ISP. Seems like you'd make a fortune since you've suddenly found so easy and cheap way to do.

  21. The ballooning costs are, by Grand+Facade · · Score: 1

    the companies officers over compensation?

    Really they are just jealous/greedy that someone else is making money (sometimes more) on their transport system.

    --
    Rick B.
  22. Re:Maybe Plum Consulting should become an ISP? by dead_user · · Score: 1

    It's bad enough that law enforcement can easily get subpoena's to track individual users now. Imagine if the government was IN CONTROL of the internet. You think we have security/privacy issues now? Shit. You ain't seen nothing yet.

  23. Re:Maybe Plum Consulting should become an ISP? by misexistentialist · · Score: 1

    If you want dedicated bandwidth that is guaranteed, then buy it. Just be willing to pay over $1000 a month for your 100Mbps line.

    Prices are significantly based on what the customer can pay, so comparing a home pricing to business pricing is deceptive. Businesses pay more for everything because they have more to pay, not because they are getting precious high-grade products.

  24. Re:Maybe Plum Consulting should become an ISP? by noems · · Score: 2

    I used to work tech support for an ISP. Its called over selling and they all do it. They make people fight for bandwidth and just make excuses that its peak hours instead of buying more bandwidth. Our company though refused to over sell. You could buy a line from our company and one from the company we got our lines from and I promise you. Your line would be down a lot, take forever to get fixed and not get max speed. You would buy the same line from my company and hit everything you paid for and get a tech support that would bend over backwards to help you with any problems you had even if it wasn't "our problem". When our peaks came close to hitting max bandwidth we bought more. Not so with all the major ISPs.. So this article is nothing new.

  25. Re:Maybe Plum Consulting should become an ISP? by Servaas · · Score: 3, Insightful

    Of course, if you don't agree you can always go start your ISP.

    The 12 year olds approach to arguments.

  26. Re:Maybe Plum Consulting should become an ISP? by mabhatter654 · · Score: 1

    Exactly.
    Those cell towers in BFE all have to have 10x the pipes versus plain voice calling. If you have 7meg to your phone... A hundred other users on the same tower adds up to fat pipes... And lots of digging for new fiber.

    In addition you have the politics going on. You'd think AT&T owning air and land could upgrade cheaply... But they made a lot of network decisions 5 years ago "for competition" ie to get more money out of other providers for simple upgrades. All those decisions add up to a bunch of the work that was "subsidized" needing to be dug up and replaced.

  27. Re:Another Report by the Same Institution Conclude by RyuuzakiTetsuya · · Score: 2

    I just got a report from Webster, Webster and Cohen that their analysts find that bears are catholic and the pope shits in the woods.

    Probably due to that new bear pope, Pope Maulington XXIII

    --
    Non impediti ratione cogitationus.
  28. Re:Maybe Plum Consulting should become an ISP? by Stalks · · Score: 3, Informative

    > their payment model isn't $0.xx/GB of transfer, it's $xxxx per Gbps of bandwidth. If ISP buys too much bandwidth, it means it will sit there without being used, or it may be used in peak times and be just sitting there the rest ~20 hours of day.

    Actually its a combination of link speed and bandwidth used.

    The majority of upstream links are billed based on the 95th percentile. This allows for your upstream to have more bandwidth then you require during average usage, but can handle your peak times without affecting your bill too much.

    http://en.wikipedia.org/wiki/Burstable_billing

  29. Re:Maybe Plum Consulting should become an ISP? by karnal · · Score: 1

    Why dig a trench? They could just use wireless!

    (yes, it's meant to be funny, not a flame)

    --
    Karnal
  30. Re:Maybe Plum Consulting should become an ISP? by mabhatter654 · · Score: 1

    The point is that at the ISP level you buy bandwidth in large dollar amounts. If an ISP decided from historical data they needed 2 pipes they can't just get a third without massive outlay of dollars. On the best case they just increased fixed costs 50% (on longvterm contract) for pipe they don't have enough customers to pay for. In the worst case they have to pay for new fiber and digging.. A huge up front capital cost.

  31. Re:Maybe Plum Consulting should become an ISP? by MrL0G1C · · Score: 1

    You countries pathetic internet link is less than 1/4 of the potential speed of a single optical fiber and probably costs less than $100 - $500k.

    In the future UK FTTC will be delivering bandwidth potential of your country to 10's of thousands of cabinets across the country.

    If you're in the ISP business, maybe you are doing it wrong.

    sources (see vid on youtube page)
    http://www.youtube.com/my_speed#
    https://secure.wikimedia.org/wikipedia/en/wiki/Fiber_to_the_x
    https://secure.wikimedia.org/wikipedia/en/wiki/Fiber-optic_communication

    --
    Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
  32. Re:Maybe Plum Consulting should become an ISP? by realityimpaired · · Score: 2, Informative

    The overage charges aren't supposed to make them lots of money, it's supposed to keep heavy bandwidth users in control so that the rest of the network doesn't suffer. Also, it doesn't matter how much it actually costs to the ISPs at that point. Nowhere they say it costs them $2.50/GB, but that's the price they're billing from you if you use over something like 250GB a month, which most people won't. They're free to do so. You're also free to choose your provider. However, don't bitch if there are no providers that sell you at the price you want.

    depends on the ISP... Bell Canada, for example, includes 2GB/month usage with their cheapest plan, and charges $2.50/GB for overage. That is obscene, and considering that they're charging you $30/mo for a 2mbit connection, there's no way you're going to convince me it actually costs them that much when I can get a 5mbit w/ 300GB/mo and $0.25/GB overage charge for $32/mo, and if I were willing to pay $37/mo, I could get 5mbit w/ no bandwidth cap at all, both from a different provider that uses the same network, meaning I'd be connected to the same port, with the same copper.

  33. Re:Maybe Plum Consulting should become an ISP? by gnasher719 · · Score: 1

    You obviously don't understand that if they were all just price fixing, then by the laws of capitalism some new ISP could easily come in and undercut them and still make tons of profit.

  34. There's more by zmooc · · Score: 1

    What seems to be missing from this analysis is the constantly changing infrastructure. While the cost for additional traffic may be low given that infrastructure, in the real world the intrastructure - especially the mobile one - needs regular updates, increasing the costs of the future additional traffic that drives the needs for these infrastructure updates.

    In the past decades we've seen regular modems, 56K, ISDN, ADSL in many varieties, Internet over cable TV, fiber, GSM, WAP, GPRS, UMTS, Edge, HDSPA, all requiring massive infrastructure upgrades.

    The pace at which customers demand such upgrades seems to be increasing with their data demands. So the ISPs may have a point but this article does not since it does not factor in the cost of the infrastructure.

    --
    0x or or snor perron?!
  35. Re:Maybe Plum Consulting should become an ISP? by tech4 · · Score: 0

    They all do it because it's the only feasible way to do business as an home customer ISP. Just think how many customers someone like Verizon has and think if there is enough bandwidth to provide them all with 100Mbps guaranteed. No, there isn't. Home users for the most part don't need that much bandwidth 24/7, but they have a need to peak at such speeds momentarily. However, they all do it at mostly different times so it works out.

    I rather take 100Mbps burstable bandwidth to home than 128kbps guaranteed. But whatever floats your boat.

  36. Incomplete Picture by argontechnologies · · Score: 3, Informative

    I run a wireless ISP in Texas. The cost of buying upstream bandwidth doesn't change much, it in fact gets cheaper per Mb/s as the pipes get huge. The real cost change is in delivery. The backbone between towers, and especially in the access points all have to be increased to accommodate the additional load. In some instances, the access points cannot technologically accommodate the load yet. The ISP model was designed on a over-subscription basis. In other words, you could have 10:1 users using a give bandwidth. With the advent of video like Netflix, this model is no longer going to be viable. We are seriously looking at having two different account types. One that will allow short video bursting, and one that will allow continuous video feeds. The latter account will cost much more than the former since it is what is driving the costs.

    1. Re:Incomplete Picture by Anonymous Coward · · Score: 0

      We are seriously looking at having two different account types. One that will allow short video bursting, and one that will allow continuous video feeds. The latter account will cost much more than the former since it is what is driving the costs.

      I'm no futurist, but my guess is within 5 years, nobody will want the short burst account type. They might think they want it, but when they see how crappy the connection is, they'll get pretty annoyed (no matter how clear you make it that the connection won't be able to stream video well.) So why not just plan to decrease your oversubscription ratio gradually to match demand and adjust your prices accordingly? You can then market yourselves as the honest ISP that doesn't overpromise and with good customer service you might actually have a decent business model.

    2. Re:Incomplete Picture by Anonymous Coward · · Score: 0

      I ran an ISP from 1994 to around 2000.

      There are many other costs that are also involved. You need more bandwidth to your interconnects, which means you need larger pipes, which means paying the local telco/provider for these pipes. Then you need to upgrade your infrastructure. There is your connection to your customer, usually controlled by the local ILEC which will charge you more for the connection then their ISP arm charges for internet. Verizon internet charges $19.95/m for DSL, but if you are an ISP, they cost to the ISP to connect to a customer via DSL is more then that $19.95/m.

      Then there is upgrading hardware.and infrastructure. We went from a single 486-SX16 server, 56K connection, 5 14.4 modems, 10Mbit Ethernet, and cisco 2001 to multiple linux servers, multiple T1's, 96 56K modems, 50 33.6 modems, Cisco 7206, 100Mbit switched network, etc. The cost of operations for the first 6 months was about $10k total. The cost of operations for the last month was around $20k+/month including a satellite Usenet feed.

      In 1994, a 56K dedicated internet connection could support 50+ users. These days, customers use 750Kbit or more per user with demand going up and up.

  37. Next up... by P01d4 · · Score: 2

    Water is wet.

  38. Business exagerates cost of X. by taxman_10m · · Score: 2

    This seems to be a general practice of business. Isn't that how the banks have been explaining minimum balance fees? It costs them so much to maintain these particular accounts that they are forced into charging onerous fees.

    1. Re:Business exagerates cost of X. by Anonymous Coward · · Score: 0

      I think there's been a misunderstanding here. The problem for ISPs is like this:

      * You run a small ISP, with a 25GB pipe from yourself to the internet. This costs you £xxx/month
      * You're maxing out that capacity.
      * One more customer joins, at £30/month.
      * You need to increase capacity to 26+GB.
      * The next pipe size available is 100GB, which costs £xxxx/month.
      * £xxx + (£30 * tiny_profit_margin_per_customer_per_month) £xxxx.

  39. Think Roads... by anon+mouse-cow-aard · · Score: 1
    If we had only a few companies making roads across entire countries, how high do we think the tolls would be? It's hard to get around using roads. It's hard to set up a competing road, without having to connect into the existing roads, and having to deal with the encumbents. It is hard to havea business case for 'competing roads' that makes much sense in the private sector. People like roads, so governments tend to be involved in getting them built, such as expropriating when needed, giving rights of way, etc... It is never a purely private sector thing because the permitting process is quite complex.

    Roads are a public good. Internet is very similar in many ways. It is clear that physical internet connectivity isn't really a competitive market, because having ten network drops to every house, much like having ten highways between the same two cities, makes little, to no sense. You end up with natural monopolies, or at best duopolies, These monopolies interests are always going to be to raise the tolls as normal private sector motivations apply. They will try to minimize investment (because that just kills profits, and improvements drive down profits) and maximize margin. It's the rational thing for them to do. If a government regulator is put in place, they will just argue with them in that direction. There is no rational free market reason for the rent seekers to do anything else. This is not an argument against private sector involvement. For example: Government often doesn't actually build it's own roads. Rather, it contracts with private sector to build roads. then owns them, and lets contracts for their upkeep. Private sector would still be doing all the heavy lifting, and still be competing on construction and maintenance contracts, they just don't own the infrastructure.

    So the real question is: Do you encourage greater overall economic growth by leaving ISP service captured by rent seeking, or does this hurt the rest of the economy that relies on the infrastructure? In the case of roads, there is a lot of public road building, as well as toll roads. Private sector only moves in on profitable highway projects where the tolls are limited by the amount of competition provided by public roads, and the un-profitable feeder roads are typically all public. The goal of citizens, and their commercial activities, is to have a decent road system that enables the economy and other societal activities.

    The rational economic goal of encumbent isp's is to maximize the rate they can charge for a minimized level of investment and maintenance.

    There is an inherent conflict.

  40. Re:Maybe Plum Consulting should become an ISP? by Bengie · · Score: 2

    There is a T1 global back-bone that sells dedicated internet bandwidth at a flat rate of $1/mbit/month in 10gbit increments. That's about $1 for 316GB(bytes)/month. I'm sure a T1 ISP gets it cheaper than that.

    Outside of of infrastructure costs, bandwidth is nearly free.

  41. Re:Maybe Plum Consulting should become an ISP? by noems · · Score: 2

    So lying to your customers is the only feasible way of doing business? Then the business has no business being in business. And who are you or anyone to dictate what people need at home? If you say you are selling something to someone, you better deliver, because even if you are not breaking the law explicitly, you are breaking a general moral law that most people in the world agree with that I have met. Over selling is straight up lying to your customer. Its not the only feasible way to do business. Our ISP did not do that. And is still in business.

  42. Re:Another Report by the Same Institution Conclude by RatherBeAnonymous · · Score: 1

    Does the duck weigh the same as witch, and is it therefore made of wood?

  43. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    you're implying that the costs would have been high up front and not afterwards. ballooning costs implies that the costs would go up with use - high fixed up front infrastructure cost business is the exact opposite of that you dumbbell.

  44. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    128kbps amounts to about 11 Gbit/day
    With 100Mbps you use that up in less than 2 minutes.

    With the specification you have given you say you would prefer to have a 100Mbps bandwidth for 2 minutes and than be completely cut off compared to 128kbps guaranteed.

    I find that hard to believe, perhaps you meant that you would prefer 100Mbps burstable with 1Mbps guaranteed inbetween. In that case I agree; that would be preferable to 128kbps.

    Without a guaranteed minimum bandwith you have pretty much agreed that it is OK for your ISP to not deliver at all.

  45. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 2

    Of course, if you don't agree you can always go start your ISP.

    Sure, just as soon as I get the same billion dollar check from our government they all did to put in their networks back in the Clinton years.

    You think they'd even let you do it if you could? Not likely.

  46. Re:Maybe Plum Consulting should become an ISP? by Bengie · · Score: 2

    "comparing a home pricing to business pricing is deceptive"

    Residential Cable Internet: $60 for 18/2 250GB cap
    Business Cable Internet: $100 for 18/2 no cap, uses separate fiber routes that have dedicated bandwidth(only shared bandwidth is on the cable infrastructure), ToS claims you get dedicated bandwidth 24/7, personal representative, no wait tech-support queue, 1 business day guaranteed service

    That $40 sure gets you A LOT. I'm eventually upgrading, but it is an extra $40/month that I must come up with.

  47. Just Look Outside the U.S. by Nishi-no-wan · · Score: 2

    Countries outside of the U.S. have no problem offering high speed unlimited data at affordable prices without any of the problems that the U.S. carriers are claiming. And the best deals are often on mobile! And, yes, there is heavy audio and video traffic in other countries as well.

    1. Re:Just Look Outside the U.S. by Anonymous Coward · · Score: 1

      Other countries are funded by their governments. In some, the entire government owns the whole infrastruture.

    2. Re:Just Look Outside the U.S. by Anonymous Coward · · Score: 0

      Well, Europe has high roaming fees, even with the EU starting to regulate it now. There's been some rumors about some carriers providing reasonable data roaming fees, but it's yet to manifest.

      And I think some european countries in UK and Germany (and possibly others) have ISPs that have caps on their fixed connections.

      That said, there are also reasonably priced high speed connections available around Europe with no caps aswell as some ridiculously cheap ones.

    3. Re:Just Look Outside the U.S. by Anonymous Coward · · Score: 0

      There might be heavy audio and video traffic in other countries, but my understanding is that services like Netflix and Hulu are almost exclusive to the United States.

    4. Re:Just Look Outside the U.S. by Glendale2x · · Score: 1

      There's also a lot of countries outside of North America that are smaller than many single US states or Canadian provinces. It's easier to do things on a small scale. Bandwidth is cheap in the US, too. It's the loop costs that get you.

      --
      this is my sig
    5. Re:Just Look Outside the U.S. by Anonymous Coward · · Score: 0

      It's just as easy to do things on 1000 small scales.

      TFTFY

    6. Re:Just Look Outside the U.S. by sjames · · Score: 1

      That's an age old excuse here, but it doesn't explain why the rates are so high in our densest population centers. It also doesn't explain why telecomm companies are so desperate to keep municipal service from being deployed in places they claim they can't profitably service.

    7. Re:Just Look Outside the U.S. by Glendale2x · · Score: 2

      I wish it was an excuse rather than reality. I can get a 100 meg of transit for $1,100 from a provider that is not Cogent. That's perfectly fine until you see the loop price for the last mile is quoted at $3,200 for a cheap Verizon FastE loop. AT&T wanted $10,000 for an OC-3 port (that's not a typo, ten thousand dollars) and they couldn't/wouldn't do FastE. And AT&T already had fiber in the building. The rates are still high in dense population centers because they can and will charge such prices. We keep buying their stuff anyway and as the competition shrinks (i.e. AT&T buys T-mobile, Level 3 buys Global Crossing, and on and on) so do any incentives to lower pricing.

      As far as why they try to prevent deployments in areas they don't serve it's probably as simple as they see it as their right.

      --
      this is my sig
    8. Re:Just Look Outside the U.S. by Anonymous Coward · · Score: 0

      The United States, whose national currency is the Euro. Did you even read the summary, nonetheless TFA?

    9. Re:Just Look Outside the U.S. by sjames · · Score: 1

      That still leaves it as an excuse rather than being a valid reason. AT&T uses the excuse all the time and just evades the question when we ask why they want so much in loop charges for a building they already serve in a dense urban area.

    10. Re:Just Look Outside the U.S. by Glendale2x · · Score: 1

      The valid reason is "because they can" and they demonstrably do. There is no excuse.

      --
      this is my sig
    11. Re:Just Look Outside the U.S. by sjames · · Score: 1

      Because they can is NOT a valid reason. That's not to say that greed isn't the reason, just that it's not a valid one. In a healthy market they would be forced to charge less or leave the market.

    12. Re:Just Look Outside the U.S. by Glendale2x · · Score: 1

      I find it unlikely that AT&T will ever leave the market and there's no need for them to lower prices, so we're left with "because they can". I suppose we could try the antitrust thing again someday.

      --
      this is my sig
    13. Re:Just Look Outside the U.S. by sjames · · Score: 1

      We could try actually regulating the markets to make them healthy OR driving AT&T out by providing the last mile as a socialized service.

      What we must not do is ever accept AT&T's excuses for their pricing.

  48. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    Do you have any ideas how isps work? What you say is not possible in this technologically backwards ass country.

  49. Re:Maybe Plum Consulting should become an ISP? by tech4 · · Score: 1

    World doesn't have enough total bandwidth to provide everyone with guaranteed 100Mbps. Overselling and calculating from usage meters is the only way to deliver faster speeds to everyone. Otherwise we would be stuck at 128kbps. Even that is probably too much 24/7 guaranteed to everyone, it would be more like 48kbps if even that.

  50. Re:Maybe Plum Consulting should become an ISP? by Bengie · · Score: 1

    If they sold at cost, we'd be paying closer to $15/month.

    I was reading an interview with one of the top consultants for ISPs. He said the average broadband ISP pays under $1/month/customer in bandwidth costs and about $8/month/customer in infrastructure and support costs. The rest is profit.

    ohh, and bandwidth costs drop about 33%-50% each year(for Teir1) because supply keeps increasing.

  51. Hold on by Dwonis · · Score: 3, Informative

    Plum Consulting claims the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB

    Is that €0.03 or €0.0003 ?

    1. Re:Hold on by BeardedChimp · · Score: 1

      Plum Consulting claims the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB

      Is that €0.03 or €0.0003 ?

      Ris?

      Sorry I don't understand your point, could you explain?

    2. Re:Hold on by Anonymous Coward · · Score: 0

      It's -0.02 €

    3. Re:Hold on by Dwonis · · Score: 1
    4. Re:Hold on by BeardedChimp · · Score: 1

      Ahhhh, ok your original comment makes much more sense now. Cheers for that.

  52. Re:Maybe Plum Consulting should become an ISP? by Desler · · Score: 1

    Yeah, they can't possibly survive at all without their over 10,000% profit margin (assuming the .01 - .03 figures are accurate)!

    Even if the figures are an order of magnitude off they are still making ((10 - .1) / .1) * 100 = 9900% or ((10 - .3) / .3) * 100 = 3233% If they are extracting such high margins then they should be more than able to pay for new infrastructure to meet demand, and thus lower costs, rather than whining and raising prices even higher.

  53. Re:Another Report by the Same Institution Conclude by thue · · Score: 1

    > that dinosaurs are in fact extinct

    According to the current understanding, birds are a subfamily of dinosaurs.

  54. Re:Maybe Plum Consulting should become an ISP? by spire3661 · · Score: 1
    --
    Good-bye
  55. Birds Are Dinosaur Theory Long Dead by AddisonW · · Score: 0

    Unless by 'current understanding' you mean you saw it in Jurassic Park.

    1. Re:Birds Are Dinosaur Theory Long Dead by mdf356 · · Score: 1

      No, by "current understanding" s/he means current understanding.

      --
      Terrorist, bomb, al Qaeda, nuclear, yellowcake, kill, assassinate. Carnivore is dead... long live Echelon.
  56. Re:Maybe Plum Consulting should become an ISP? by lolcutusofbong · · Score: 3, Insightful

    No, the adult approach is to realize that in countries without a common-carrier law for ISPs, it's prohibitively expensive to start a new ISP, so effort is better spent getting better deals out of existing ISPs.

  57. Re:Maybe Plum Consulting should become an ISP? by slackbheep · · Score: 4, Insightful

    Oh come on, you think Bell is charging $13/gb overage just to "keep us in line" and not to line their pockets? If they wanted to keep users in line, they'd throttle or contact the account owner and advise them of the issue/threaten fees. Instead they're skipping those steps and laughing all the way to the bank.

  58. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    and water is not wet. It causes things to be wet, but it by itself is not wet. What else did the institution get wrong?

  59. it's not a gradual thing by Anonymous Coward · · Score: 0

    yes it costs nothing to support more traffic during nonpeak hours

    and it'll cost nothing to support more traffic until lines hit capacity

    and then when you reach some limit the cost will explode

  60. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    According to the current understanding, birds are a subfamily of dinosaurs.

    According to the definition of the word "dinosaur", birds are not dinosaurs. (Note that, although one definition on that page says "one group of dinosaurs evolved into birds", that doesn't mean that they continued to be dinosaurs after they became birds.)

  61. Re:Maybe Plum Consulting should become an ISP? by Ihmhi · · Score: 1

    I agree with you on this. I wonder how long phone and/or telegraph lines were private before they were turned over into a government utility. What about electric?

    It'd be nice to be able to change Internet or Cell providers as easily as you can change landline providers.

    This can go the wrong way, though, too... look at ESCOs (Energy Service Companies). Google "IDT Energy New York" and see the sort of dirt shenanigans they've been up to. I've yet to meet anyone who actually saved money switching to an ESCO.

  62. Re:Maybe Plum Consulting should become an ISP? by I_Voter · · Score: 1

    .(US).. law enforcement can easily get subpoena's to track individual users now. Imagine if the government was IN CONTROL of the internet.
    Are you saying that although the US government can gain large amounts information it wants quite easily from private enterprises now - if it became a publicly regulated utility they could gain more? That may be true, but I view it more as a question of political power. My rule of is that those without power tend to suffer. Back in the 60's - when the "Russkies" terrorized our corporate state - It seemed to me that privacy laws were much stronger. That would include publicly regulated utilities.

    How do Slashdot people feel about the regulation of political parties in the U.S.? People who tend to oppose government regulation never mention this subject. It doesn't seem to interest them.

    Great Quote from 1927
    Here in the last generation, a development has taken place which finds an analogy nowhere else. American parties have ceased to be voluntary associations like trade unions or the good government clubs or the churches. They have lost the right freely to determine how candidates shall be nominated and platforms framed, even who shall belong to the party and who shall lead it. The state legislatures have regulated their structure and functions in great detail."

    ref What is a Political Party?
    http://i-voter.tripod.com/US_PoliticalParties.html

  63. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    According to the definition of the word "dinosaur", birds are not dinosaurs.

    Yeah, and a dictionary has never been out of date on a scientific topic before...

    When you want an answer on current science, look to the journals, not to Funk & Wagnalls.

  64. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    It's not a question of "current science". No-one's disputing the evolutionary history; the fact is that the word "dinosaur" has a meaning in the English language, and that meaning does not encompass birds.

  65. LOL by AddisonW · · Score: 0

    Learn to read actual research journals from the past five years dimwit.

    Linking to some bird dinosaur fanboy's webpage at Berkeley is about as silly as linking to wikipedia.

    1. Re:LOL by Anonymous Coward · · Score: 0

      Nature is a pretty well-established journal.

      They start out this article from 2009 with "Birds are dinosaurs. That's hardly the stuff of headlines any more, as data have streamed in revealing anatomical similarities between birds and the theropod dinosaurs from the tips of their noses to the tips of their feathered tails."

      These kids are going to keep playing on your lawn, Mr. Grumpy, go back inside.

  66. Bird-Dinosaur Theory Died Years Ago by Anonymous Coward · · Score: 0

    The meaning of the word 'dinosaur' has nothing to do with the dead Bird Dinosaur Theory.

    Finds over the past few years have put a definitive nail in the coffin of the Bird Dinosaur Theory. There are still people who still have a tremendous emotional investment into the now dead theory and of course the dead theory continues to linger in the public minds because so many people latch onto the silly 'your eating a dinosaur with each chicken dinner' meme.

    1. Re:Bird-Dinosaur Theory Died Years Ago by Anonymous Coward · · Score: 0

      Finds over the past few years have put a definitive nail in the coffin of the Bird Dinosaur Theory.

      [citation needed]

  67. The biggest cost component by kilodelta · · Score: 4, Insightful

    Is power. And power had been fairly stable. Add to that the fact that newer routing gear isn't as power hungry as the old and you can see we are getting raked over the coals.

    It's the same thing with telephony. The long distance market fell apart because the cost to carry the calls kept dropping with increased levels of automation. Now long distance is bundled in with the normal monthly cost of most phone plans wired or wireless.

    And even wireless services, they're getting increasingly less expensive to provide too. But they'll try to charge all the market will bear.

    And need I bring up banks that rely on some of the technologies above? Why do you pay a foreign ATM fee that's a full 30% of the average $20 withdrawal when we KNOW that the cost for the network transports are hundreths of a cent per transaction? The bottom dropped out, but banks being greedy, rapacious bastards, will charge all the market will bear.

    1. Re:The biggest cost component by Anonymous Coward · · Score: 0

      How does infrastructure laying and maintenance factor in? I'm under the impression tearing up roads to lay new line every 5-10 years is a significant cost, as is launching satellites, and that the other countries that "do it better" as another poster said have the state pay these costs.

  68. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    This is like saying "'one group of mammals evolved into humans' but that doesn't mean we continued to be mammals after we became humans."

  69. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    the fact is that the word "dinosaur" had a meaning in the English language ... that did not encompass birds.

    FTFY. We now know better.

    (captcha: scorner)

  70. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Shockingly enough, replacing words in a sentence and coming up with something false doesn't mean the original sentence was false too. Your variation is false because the definition of "mammal" includes humans, but mine was true because the definition of "dinosaur" doesn't include birds, and any attempt to claim otherwise is just Newspeak.

  71. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Yeah, and once upon a time the definition of "animal" didn't include humans. I suppose redefining humans as animals was just false and "Newspeak" too.

  72. Re:Maybe Plum Consulting should become an ISP? by ewanm89 · · Score: 1

    There is no such thing as guaranteed bandwidth on a packet switched network. It only costs the infrastructure and it to be bought and installed to increase bandwidth, just put in a bigger pipe and voila. The problem is the complaining ones built the original networks on the cheap or justso many years ago thatit should have been upgraded/replaced years ago, and the price is going up and up of the amount they have to replace by the day cause they haven't been keeping up. Oh, and I would love to have a 100Mbps line even for a minute here, but unless I pay for them to dig up the fucking road I'm stuck with a maximum of 3.5Mbit/s down cause that's the shitty quality of the copper.

  73. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Actually, on rereading your post more carefully I take the previous reply back. Your version is correct, in the fact that a group of mammals evolved into humans doesn't mean that humans are mammals. However, it also doesn't mean that humans are not mammals. In the bird/dinosaur case, birds are not dinosaurs because they do not possess the key characteristics implied by the term "dinosaur", but humans are mammals because they do possess the key characteristics implied by the term "mammal".

  74. Re:Maybe Plum Consulting should become an ISP? by ewanm89 · · Score: 2

    I wish BT would just replace my crappy last mile already, as it maxes at 3.5Gbps at the moment cause it's crappy 70's copper that should have been replaced a decade ago.

  75. Re:Maybe Plum Consulting should become an ISP? by MrL0G1C · · Score: 1

    3.5Gbps ... wish I got 3.5Gbps you lucky bastard... ;-)

    --
    Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
  76. Re:Maybe Plum Consulting should become an ISP? by shentino · · Score: 2

    I think everyone with a qualified head knows damn well that "start your own ISP and quit whining about the monopoly" has been stomped into the ground by EVERY OTHER ENTERPRENEUR that ALREADY TRIED IT in a given market.

    If capitalism is so great and bad companies also go away, then why are many places still stuck with shitty service from an ISP that's been around forever?

  77. don't tell edwina by Anonymous Coward · · Score: 0

    she just doesn't care.

  78. Re:Maybe Plum Consulting should become an ISP? by shentino · · Score: 1

    Someone tried that and the ISPs sued them over it.

  79. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    What does "better" mean? Is there something in the sequence of letters that makes the word inherently more suitable for a meaning that includes birds than the meaning that everyone uses it for?

  80. Peer review, please? by macraig · · Score: 1

    Call me when this has been subjected to something resembling peer review and still holds up. As it is, the source of this report has suspect motivations given who paid for it. This could be 90% confirmation bias.

  81. Re:Maybe Plum Consulting should become an ISP? by swalve · · Score: 1

    Dumbell yourself. If usage is continuously going up, you are going to have to incur those high up front install costs on a regular basis

  82. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    You really have no idea what you're talking about, so just quit while you're closer to being ahead.

  83. Re:Maybe Plum Consulting should become an ISP? by adolf · · Score: 1

    There is a T1 global back-bone that sells dedicated internet bandwidth at a flat rate of $1/mbit/month in 10gbit increments. That's about $1 for 316GB(bytes)/month. I'm sure a T1 ISP gets it cheaper than that.

    [citation needed]

  84. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    You really are a deluded little shite, so just kill yourself.

  85. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Here's a fucking clue: mammals are a class, okay? So any "characteristics implied by the term" mean they are mammal characteristics. The fact that humans evolved from mammals sure as hell means they are mammals, because you can't evolve out of a class.

    Same with dinosaurs - for example, they're classified as diapsids which were defined by characteristic holes in the sides of their skulls. Not all diapsids have these - some have lost them, such as snakes, but they are still classified as diapsids and all their descendants forevermore will be diapsids, no matter what other features they evolve, until they go extinct.

    If birds are descended from dinosaurs they will always be classified as dinosaurs because evolution is a branching tree.

    You get it now? Done talking out of your ass? Kindly shut the fuck up and go read a book.

  86. Marginal cost analysis is incomplete by George_Ou · · Score: 1

    Almost all of these types of reports citing how cheap *additional* gigabytes cost only reflect the marginal costs. They don't reflect the underlying infrastructure cost, the cost of workers (often union) and their healthcare benefits. This is why when we look at broadband providers financials, the gross profit margin will be in the 60% range but the net profit margin will be in the sub 10% range.

  87. Re:Maybe Plum Consulting should become an ISP? by clarkn0va · · Score: 1

    The majority of upstream links are billed based on the 95th percentile.

    Correct.

    but can handle your peak times without affecting your bill too much.

    Incorrect, as least as concerns the quotes I've received from 3 different fibre providers in the past year. My 95th percentile usage is around 13 mbps, which would cost me approximately the same as a 40 mbps dedicated connection from the same providers. 95th percentile billing sounds smart, but in actuality is a rip-off, at least in the Alberta market.

    --
    I am literally 3000 tokens away from the chaotic crossbow --Stephen
  88. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    World doesn't have enough total bandwidth to provide everyone with guaranteed 100Mbps. Overselling and calculating from usage meters is the only way to deliver faster speeds to everyone. Otherwise we would be stuck at 128kbps. Even that is probably too much 24/7 guaranteed to everyone, it would be more like 48kbps if even that.

    If it's true, then you shouldn't need to lie about it. If you're full of shit, then yeah, you probably need to lie.

  89. Re:Maybe Plum Consulting should become an ISP? by Anonymous Coward · · Score: 0

    Actually... Bandwith used for netflix in USA has been reported to take up more than the torrenting...... And those only use the network like 1-2 hours per day..

    If the ISP dont want heavy users on their network then do one of the following..
    1. Limit the bandwith of the user... Why sell 100Mbit of you only can deliver 10Mbit.
    2. Limit the mount of traffic the user is allowed to transfer per hour..

    OR... get some shaping sollution that gives all active users the same % of the available bandwith... This does not interfere with the quality for others except that the ISP cannot overbook their uplink as much if they have too many heavy users...and for those see point 1&2....

    If they still have problems and are loosing customers maybe they should think about that they are overcharging their customers and need to adjust their pricing..

  90. Re:Maybe Plum Consulting should become an ISP? by mr_mischief · · Score: 1

    Four-conductor (and in some places two-conductor) 128Kbps symmetric with 4-hour SLA is available pretty much everywhere in the US. It's called ISDN. Call your phone company and get a price quote, then compare it to your 100 Mbps, 50 Mbps, or 25 Mbps bursting service with crappy SLA.

    64 Kbps is a DS-0 equivalent, which is a digital voice line. For ISDN you use what's called a B channel. ISDN is available as one B Channel, two, or 23 (ISDN Prime Rate Interface, or PRI). You'll get guaranteed speeds and a great SLA, but you'll pay for it.

    A PRI is about $200 to $500 depending on where you get it, and you're still at the lowest aDSL speeds.

    I'm not aware of anyone advertising ISDN BRI, but since it was about $125 to $180 per month in the late 1990s I'm sure your telco's CO would love to sell that to you over aDSL if you insist.

  91. Re:Another Report by the Same Institution Conclude by mr_mischief · · Score: 1

    So something can't evolve out of a class even if its characteristics are different? So all life on Earth is bacteria?

  92. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    So something can't evolve out of a class even if its characteristics are different? So all life on Earth is bacteria?

    No, and no. Read a fucking book.

  93. Re:Maybe Plum Consulting should become an ISP? by monkyyy · · Score: 1

    ^this
    who has the money to bribe the local officials to ignore the bigger bribes from the evil crops; and THEN start building ur isp

    --
    warning pointless sig
  94. The 95th Percentile by Anonymous Coward · · Score: 0

    The colo biz has used data transfer as a b/w measure forever, and very few complaints result. Tenants pay for what they use, and everyone enjoys the same speed - fast. Not saying you could just flip a switch and make this work for consumers, but the sooner we can establish two things, the better it will be for everyone (including the ISPs): a clear correlation between what I use and what I pay, and a network that gives me performance and speed I don't feel stoopid about paying for.

  95. Re:Another Report by the Same Institution Conclude by cbiltcliffe · · Score: 1

    Of course not. They're still around, running the ISPs.

    --
    "City hall" in German is "Rathaus" Kinda explains a few things......
  96. Re:Another Report by the Same Institution Conclude by Anonymous Coward · · Score: 0

    Yeah, well if you go by the dictionary, "wet" can mean "consisting of, containing, covered with, or soaked with liquid (as water)" and "in a liquid form or state." Sounds like water qualifies!

  97. Re:Maybe Plum Consulting should become an ISP? by Coren22 · · Score: 1

    Check the difference in FiOS prices.

    Service Res Bus
    15/5 49.99 64.99
    25/25 69.99 84.99

    it goes on and on, the highest tier is 199.99 vs 199.99 for 150/35 so at the highest rate, business pays the same, that $20 or less really buys some service.

    --
    APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
  98. Re:Prices by Coren22 · · Score: 1

    Move to a FiOS service area, you can get 150/35 for $200. It isn't symetric, but I don't think any US carrier is really setup for symetric unless you want to pay the DS and OC rates for your connection (DS3 45/45 for $3000).

    --
    APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
  99. Re:Maybe Plum Consulting should become an ISP? by Coren22 · · Score: 1

    10 gbit over t1? do you mean maybe OC?

    http://en.wikipedia.org/wiki/Optical_carrier

    Also, when talking about internet connections, it is DS, not T, T is just telephone service.

    --
    APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?